Gas Deal: US Court Didn’t Give $6.59bn Judgment Against Nigeria- Malami

Mr. Abubakar Malami, SAN, Attorney-General of the Federation and Minister of Justice
Mr. Abubakar Malami, SAN, Attorney-General of the Federation and Minister of Justice

Mr. Abubakar Malami, SAN, the Attorney-General of the Federation and Minister of Justice, Tuesday, debunked reports that a United States District Court entered a default judgment affirming a $6.59 billion arbitral award against the Federal Government.

The judgment was said to have been entered in favour of a firm, Process and Industrial Developments Limited (P&ID), following a dispute that arose over a natural gas supply and processing agreement signed by the Ministry of Petroleum Resources in 2010.

In a press statement he issued yesterday, the AGF, who acknowledged that the firm had indeed initiated enforcement proceedings against Nigeria in the US, however, maintained that the legal action was still in progress.

He said, “The attention of the Federal Ministry of Justice has been drawn to false media reports being peddled in the media space to the effect that a United States District Court has entered a default judgment affirming a 6.59 billion arbitral award in favour of P&ID against the Federal Government in a foreign enforcement proceeding on the alleged ground that the Federal Government failed to enter a defence in the matter.

“The Ministry wishes to state categorically that no judgement was entered against Nigeria in the enforcement proceedings by P&ID. The FG through its foreign solicitors, Messrs. Curtis, Mallet-Prevost, Colt & Mosle LLP, has commenced the process of challenging and defending the enforcement proceedings.

“It needs to be stated that what is being taunted as a default judgement was actually a default entry made by the Court Clerk. Under the Foreign Sovereign Immunities Act, FSIA, a Defendant has up to 60 days period to answer to a petition filed against it.

“Where no response is entered for the Defendant, the Court Clerk upon application by the petitioner makes a default entry, which in this case was made on 5th June, 2018.

“It is to be noted that under the FSIA, a default judgment cannot be entered against a foreign state like Nigeria unless the presiding judge determines so after the petitioner/claimant must have established its entitlement to a default judgment.

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“Based on the presumption of sovereign immunity, the US District Court is still under obligation, despite default by a Foreign State, to determine whether the Foreign State is immune from the jurisdiction of the US Court under FSIA or whether the case before it falls within one of the recognised exceptions.

“Even where the court determines that it has jurisdiction, a default judgment will not be granted automatically or as a routine matter to be handled by a court clerk as this can only be done after a formal trial.

“On the 12th of June, 2018, our foreign solicitors filed the necessary application to set aside the clerk’s default entry and to dismiss the entire case on grounds of defective service and lack of personal jurisdiction over Nigeria in line with the provisions of the FSIA.

“We wish to re-assure the general public that there is no default judgement against Nigeria at the instance of P&ID.

“We urge Nigeria’s foreign friends and investors to ignore the malicious reports. The Federal Government is also making concerted efforts through legal and diplomatic channels to resolve the issues in contention between the parties in this matter.”